The leitmotif of my speech today : Industrial Upgrading – General Trend of Development of Chinese Textile Industry. Centering on this general trend, I will elaborate on the following four viewpoints:

I. Chinese textile industry is at critical period of upgrading

II Upgrading of Chinese textile industry is the general trend of the times led by a new cycle of scientific and technological revolution in process of economic globalization

III. Upgrading of Chinese textile industry is the objective requirement from Chinese modernization drive to comprehensively build up a well-off society

IV. Chinese textile industry will take a science-led development roadmap to head for modernization, the world and the future

I. Chinese textile industry is at critical period of upgrading

Textile industry is very important in a close-knit relationship with the people’s livelihood, a highly-internationalized sector in process of industrialization in China. Textile and clothing has been playing a very prominent “pulley” role in pulling on progress of various sectors of national economy. In 2006, the fiber processing volume totaled 30.7 million tons, employing 20 million people in the whole textile industry in China. To be more exact, Chinese man-made fiber production reached 20.25 million tons, cotton yarn 17.4 million tons, and textile and clothing export came up to $147 billion; The import of various raw materials, textile chemicals and machinery added up to $31.7 billion. Moreover, there are now over 40,000 textile enterprises in number, taking into account only the above-designated scale & size of enterprises( only the companies with individual annual sales surpassing 5 million Yuan are taken count of). Of all these enterprises, the state-owned and state stock-holding companies account for 3.19%; In view of capital structure, the state capital has dropped to 5.78 % while foreign capital and the capitals from Hong Kong, Macau and Taiwan combined to represent around one-third of the total, but the export value from the latter takes up 32.21% of Chinese total textile shipment. It is noteworthy that the export delivery value(factory shipment value) of those above-scale enterprises represents 26.9% of their output sales, but accounts for 57.89% of the whole textile export. In the Input/Output Table of National Economy (2002), the impact factor of textile and clothing industry is 1.223, taking the sixth standing in 41 sectors of national economy.

With this setting, the future development of Chinese textile industry means a lot not only to Chinese modernization process, but also to the prospect of the world textile industry. To respond to the general trend of the world textile industrial growth driven by economic globalization and new scientific and technological revolution and to the objective requirement from comprehensively building up a well-off society, Chinese textile industry is entering a critical period for upgrading itself, and will speed up the upgrading process in the 11th Five Year Plan period. By the end of this period, the initiative innovation ability will have been largely enhanced so as to turn out a good number of technologies and brands with proprietary patents and international reputation. Furthermore, the industrial structure will have been further optimized, the entire level of technology and equipment will have been raised by a large margin, the low-end primary processing capacities characterizing low efficient, highly energy-consuming and highly pollutant operation will effectively have been restrained and eliminated, and instead, the energy-reducing and environment-friendly production will have made substantial progress so that a higher-level industrial competitive advantage system characterizing quality, innovation and quick response as a core value will have taken shape to construct an industrial growth mode in line with new industrialization roadmap.

II. Upgrading of Chinese textile industry is the general trend of the times led by a new cycle of scientific and technological revolution in process of economic globalization

2.1 The new scientific and technological revolution that began in the 20th century is inducing a transformation in traditional textile industry

——In the early 20th century, the two important discoveries in physics – theory of relativity and quantum mechanics, derive a series of findings such as semi-conductor, integrated circuit, laser , magnetic and super-conductor etc., laying a solid foundation for the science of information technology, led by which there came a revolution of traditional manufacturing by adopting the core technologies like micro-electronics, photoelectron and micro-photoelectron-mechanics.

--In the early 20th century, the chemistry science entered “ molecule design” era to ignite a series of theoretical explosions with respect to synthetic chemistry, material chemistry, life chemistry, nano-chemistry etc.. Nanometer-grade parts were made possible by assembling atoms and molecules at the cross of new century, which marks a new era of material revolution in the evolution of human society.

——In the mid-20th century, from the successful construction of DNA double spiral modal, people have gradually learned biological heredity system in the molecular level to induce an important breakthrough in gene science. Thus , life science and bio-technology have greatly been pushed forward to result in a green revolution.

The revolution of new science and technology is drawing a series of transformation in textile industry. Digitalization and smartization of productive tools have changed human-machine relationship as can been proved by the fact that soft and flexible operation in the course of production take place of traditional mass production , IT makes it possible for industrial company to combine with network economy . What’s more, the interactive influence of the globalized way of life and production, coupled with the new-type correlation between producer and consumer, all pushes forward the integration of material originality and cultural creativity. As a consequence, the new added value out of the products creativity rises in the industrial growth while its dependency on raw material in traditional way of growth is reduced. With the pushing-on effect of the green revolution, the transformation in textile industry will continuously weed through the old to bring forth the new. In a word, new science and technology will make traditional textile industry take a thorough change into a rebirth, fresh in humanistic concern with regard to raw material, energy, and environment.

2.2 Global economic integration speeds up the structural adjustment of textile industry around the would

Economic integration could reduce the resistance, lower the costs for the transnational flow of production factors, and improve the TFP (Total Factor Productivity) of textile industry significantly. Among different countries, the traditional vertical linkage s